Blockchain data mining: what is the difficulty?

In our articles we emphasize the importance of both the cost of hardware and electricity in the blockchain data mining. The difficulties of mining will be highlighted in this article. Through this analysis we will provide essential elements for those who want to undermine bitcoins and cryptocurrencies.

In a simplified way, we can define this parameter as the resistance to mine a certain crypto.

The importance of the hardware

To an inexperienced eye, it may seem that the value of extraction of a hardware is constant over time, but certainly,it is not. For hardware there are two aspects to keep under control:

1. the wear of components over time (which diminish their performance)
2. the constantly increasing extraction difficulty.

If the algorithm remain the same,why the difficulty increases? The answer lies in the concept of blockchain data mining itself.

When we try to extract crypto we enter into competition, for the resolution of a block and then to be paid, with other miners.This implies that, especially in the short term, luck has a significant weight. The higher number of more people thattry to extract a cryptocurrency, the higher the difficulty will be. In other terms, it will be more difficult for us to achieve results.

Mining Bitcoin

Equally intuitive is to understand that the increase of miners focusing on one crypto rather than another often relates to its increase in price. Blockchain data mining of Bitcoin, for example, has become a real “challenge” because we are going to collide with big entrepreneurs. Mainly in China, who even rented Boeing 747 to bring faster components to their “Farm”.

Another parameter to keep in mind is that the technological world is constantly evolving. Therefore, buying a hardware that has been present on the market for some time may not be a disadvantage. When a more performing solution comes out, our results could be far lower.

For more information on the world of cryptocurrencies read the other articles on our site.